The S&P 500 started off the week with a bang, but then sold off closing Friday at 5,870 for a down week. Monday was a carryover of the election bump and the S&P 500 closed above 6,000 for the first time while setting a new all-time high. Tuesday was a reversal day as the markets sold off in the morning but then reversed course upward in the afternoon. Before Wednesdays open, the October annual inflation rate came in at 2.6%, in line with market expectations but marking the first increase in inflation in seven months. The markets absorbed this news with the S&P 500 closing flat, but interest rates again seemed to take over the spotlight. On Thursday the October Producer Price Inflation rose 0.2%, in line with expectations, but then Fed Chair Powell stated that the central bank wasnt in a hurry to cut interest rates, noting that the economys strong growth may reduce the rate of future rate cuts. As such, the S&P 500 fell and closed at an intraweek low. This sell off continued into Friday, with the S&P 500 having a daily loss of over 1%, and giving back the gains of the post-election rally. From a technical perspective, interest rates have been an interesting story for the last two months. On 18 September the Fed announced the first rate reduction, and on the previous day the 10 year yield was at a Year to Date low of 3.643%. On Friday it crossed above 4.5%, its highest level since 31 May. As I said, its an interesting story in how the markets work, when one would have thought wed be seeing rates much lower. For next week were light on economic news but get earning reports from Walmart on Tuesday and Nvidia on Wednesday. For TSP TIPS both the S and C funds would have made new all-time highs on Monday, but since the TSP was closed for Veterans Day, there was no official TSP price. That said, the S fund did make a new high on Tuesday, but the C funds last high still stands on last Friday, 8 November. From a Composite Score basis both the S and C funds remain maxed out at 100, and the S fund still leads the Performance Ranking leaderboard, 3+% greater than the C fund. As such, we recommend no changes to our current investment mix.
The S&P 500 started off the week with a bang, but then sold off closing Friday at 5,870 for a down week. Monday was a carryover of the election bump and the S&P 500 closed above 6,000 for the first time while setting a new all-time high. Tuesday was a reversal day as the markets sold off in the morning but then reversed course upward in the afternoon. Before Wednesdays open, the October annual inflation rate came in at 2.6%, in line with market expectations but marking the first increase in inflation in seven months. The markets absorbed this news with the S&P 500 closing flat, but interest rates again seemed to take over the spotlight. On Thursday the October Producer Price Inflation rose 0.2%, in line with expectations, but then Fed Chair Powell stated that the central bank wasnt in a hurry to cut interest rates, noting that the economys strong growth may reduce the rate of future rate cuts. As such, the S&P 500 fell and closed at an intraweek low. This sell off continued into Friday, with the S&P 500 having a daily loss of over 1%, and giving back the gains of the post-election rally. From a technical perspective, interest rates have been an interesting story for the last two months. On 18 September the Fed announced the first rate reduction, and on the previous day the 10 year yield was at a Year to Date low of 3.643%. On Friday it crossed above 4.5%, its highest level since 31 May. As I said, its an interesting story in how the markets work, when one would have thought wed be seeing rates much lower. For next week were light on economic news but get earning reports from Walmart on Tuesday and Nvidia on Wednesday. For TSP TIPS both the S and C funds would have made new all-time highs on Monday, but since the TSP was closed for Veterans Day, there was no official TSP price. That said, the S fund did make a new high on Tuesday, but the C funds last high still stands on last Friday, 8 November. From a Composite Score basis both the S and C funds remain maxed out at 100, and the S fund still leads the Performance Ranking leaderboard, 3+% greater than the C fund. As such, we recommend no changes to our current investment mix.